Who is the landlord in this brave new world?

With the foreshadowed, large-scale transfers of public housing stock to the community housing sector, the question arises as to who is the landlord.

Read our answer to this question here.

The Bays Precinct: housing update

Our February 2016 analysis of NSW Government developer UrbanGrowth's plans for Sydney's Bays Precinct, and the dearth of Social and Affordable Housing options therein, noted the following regarding the Sydney Fish Market site:

"An article in The Australian dated 21 January 2016 provides that UrbanGrowth has requested submissions from commercial property agents for the sale and redevelopment of fish market site. The site is being renewed with reference to a private memorandum of understanding between its owners and UrbanGrowth. It states that the request for redevelopment is "aimed at turning the block into a world-class food market, with the winning party to also build apartments on the site." It is not provided that these apartments will include any Affordable and/or Social housing component."

Above: The current Sydney Fish Market

Singaporean property development giant Oxley Holdings has announced an intention to develop the Fish Market site. In a statement to the Singapore Stock Exchange dated May 14 2016, CEO Ching Chiat Kwong provided that "The Board of Directors of Oxley Holdings Limited wishes to announce that the group plans to enter the Australian market and is currently looking at Sydney's Bays Precinct as the location for a flagship commercial and residential project to add to its project portfolio. The Fish Market site at Pyrmont is one of several sites considered by the group as a potential redevelopment site. In line with its business strategy, the Group will collaborate with a local partner and has identified Brookfield Multiplex as a potential partner. Further information will be announced when there are material developments." 

Reporting on the announcement, The Australian newspaper noted, "The [Fish Market] site is tipped to attract a bevy of other developers, with Lend Lease, Grocon and Malaysia's UEM Sunrise Berhad among potential runners."

The announcement was not covered by UrbanGrowth's own 'Bays Precinct newsroom'. 

Our response

Though the Oxley Holdings announcement is far from definitive, it appears to signal that the wheels of Government action are very much turning on the redevelopment of the large package of land comprising the Fish Market and neighbouring waterfront. Given The Australian's previous reporting, and the top-tier status of the developers set to compete for the contract, it is also reasonable to conclude that the residential component of the project will deliver a substantial quantity of new dwellings. 

Yet Social and Affordable Housing remains, as far as we can tell, entirely off the table. We can therefore only repeat our previous concern that such an approach to redevelopment will constitute a unique opportunity lost - for the huge number awaiting Social and Affordable Housing in inner Sydney, and for the area's social mix. 

We'd also refer to the recent musings of the State MP for most of the Bays Precinct site, Jamie Parker, on the direction of the project. Mr. Parker stressed the need to provide, "sustainable, integrated, democratic, vibrant infill development that provides continuous public access to the harbour front, includes social and - importantly - affordable housing, recreation and community facilities." He is concerned that a prioritisation of commercial and private residential developments, and a shortfall in community consultation, will see the Bays Precinct end up as "Barangaroo on steroids".

NSW Government announces SAHF shortlist

The NSW Government has announced that nine parties have been shortlisted to participate in the first stage of the Social and Affordable Housing Fund ('SAHF'). The SAHF was established in 2015, with $1.1 billion in seed capital from the State, to assist Community Housing providers, private developers, landholders, and NGOs to develop Social and Affordable Housing. 

Above: An award-winning Social Housing development 

The shortlisted parties include four standalone applicants - specialist Community Housing providers Link and St George, plus BaptistCare and Uniting, care organisations involved in Community Housing. The other five are consortia containing Community Housing providers and/or care organisations and private interests. At the industry briefing concerning the SAHF, NSW Government representatives suggested that only consortia would be considered. The State received 24 applications in total. 

There is no indication of where the shortlisted parties propose to construct new housing, nor how many properties each applicant intends to deliver. However, the SAHF project team previously indicated that approximately 30% of dwellings to be provided at the first stage will be in regional NSW. Nor is there any indication of how many parties will ultimately be successful. But given 3000 properties will be built in the initial tranche, and the minimum project size is 500 dwellings for metro-based applications and 200 for regional or mixed applications, it is possible that all shortlisted parties could be selected.

The shortlisted applicants must now submit detailed proposals. The NSW Government is expected to announce its preferred applicants in August 2016. The announcement provides that successful applicants are expected to begin tenanting SAHF properties in two to three years. 

The Social and Affordable Housing fund is one means by which the State hopes to increase the Social Housing portfolio under the overarching 'Future Directions' plan. 

Parliamentary Inquiry into repairs and maintenance of public housing

Submissions to the Inquiry highlight tensions between repairs & maintenance and disposal, renewal & redevelopment of the public housing portfolio.

Family and Community Services submission available at this link.

NSW Federation of Housing Associations submission available at this link.

Tenants' Union submission available at this link.

Redfern Legal Centre submission available at this link.

Full list of submissions available at this link.

The Tenants Union will give evidence at the Inquiry's public hearing on May 9th 2016.

Social and Affordable Housing Fund - update

Some developments relating to the NSW Government's $1 billion Social and Affordable Housing Fund have occurred since an industry briefing was conducted in December 2015. 

Premier Mike Baird discussing the Social and Affordable Housing Fund

Regional allocation

Most notable is that the SAHF Project Team has provided information confirming that phase one of the initiative will aim to deliver approximately 30% of the 3000 dwellings to be provided in regional NSW. The Project Team defines 'regional areas' as all local government areas outside of Sydney, Newcastle, Wollongong, Gosford, and Wyong. At the industry briefing, NSW Treasury Project Director Richard Mills had said the Government did not have a preference for proposals from metropolitan or regional areas. 

This allocation appears to be largely consistent with both tenant demand and the current dispersion of Social Housing stock in NSW. Though figures vary according to sub-region, waiting times for Social Housing are most often higher in Sydney, Newcastle, the Central Coast, and Wollongong than in other areas of NSW. Indeed most property types in most areas of Sydney, Newcastle, the Central Coast, and Wollongong have waiting times of 5-10 years or more. Moreover, the overwhelming majority of current Social Housing dwellings are situated in or near major metropolitan regions. Centre for Affordable Housing data provides that, in 2011, 93,945 of 114,602 Social Housing dwellings in NSW (i.e. 82%) were situated in the statistical districts of Sydney, Hunter, and Illawarra. The Sydney statistical district includes the Central Coast.

North Coast Community Housing Company CEO John McKenna has told The Daily Examiner that the SAHF's requirement that at least 200 social housing dwellings be delivered in any one proposal is prohibitive for providers operating in regional areas. He raised the prospect of his organisation forming a consortium with other Community Housing providers in order to submit a proposal satisfying the criterion. He also noted, "Unlike metropolitan areas, we wouldn't be able to build a 100-unit tower, so our proposal would have to be based around low density or medium-density opportunities".

Launch and Future Directions

On January 30, the Social and Affordable Housing Fund was 'officially launched' by Premier Mike Baird, Treasurer Gladys Berejiklian, and Minister for Social Housing Brad Hazzard. Project partners NCOSS and Infrastructure Partnerships Australia also participated. However, it appears that the launch will not impact upon the administration of the project in any substantive way. Both the media release and the associated reporting neither built on nor contradicted anything provided in the industry briefing or elsewhere. 

Similarly, the fund is noted as forming part of the NSW Government's Social Housing strategy for the next decade in the recently released Future Directions paper (analysis of that document here). However, it is only mentioned in passing, and the paper provides no new information on the project. 

The Bays Precinct - social and affordable housing

In October 2015, the UrbanGrowth NSW released a comprehensive transformation plan for the redevelopment of what it refers to as 'The Bays Precinct'. The precinct is so named for its proximity to four harbour bays on the western fringe of the Sydney CBD. It is made of up 95 hectares of land:

i) The port facilities, silo complex, and disused power station at White Bay and Glebe Island;

ii) The industrial area, light rail line, and disused heavy rail lines along Lilyfield Road, Lilyfield;

iii) The Sydney fish market, Pyrmont;

iv) Wentworth Park, Glebe;

v) Path areas connecting these sites. 

Aerial view of 'The Bays Precinct' (White Bay in foreground)

According to the transformation plan, this represents a major redevelopment project to be undertaken over a 25-year period. The plan lists nine overarching project objectives. Objective three is "To deliver housing choices, including affordable housing options, through design, finance and construction excellence". The plan also divides planned works into "immediate" (2015-2019), "medium-term" (2019-2022), and "longer-term" (2022-) priorities. 

Delivery of affordable housing is only referenced with regard to one sector of the precinct to be redeveloped - the Lilyfield road site. It reads, in full, "Future uses could include a mix of different housing choices, including affordable housing, as well as public spaces and employment uses." The Lilyfield site is listed as a 'longer-term' priority. 

The document does not make any reference to the delivery of social housing.

An article in The Australian dated January 21 2016 provides that UrbanGrowth has requested submissions from commercial property agents for the sale and redevelopment of the fish market site.The site is being renewed with reference to a private memorandum of understanding between its owners and UrbanGrowth. It states that the request for redevelopment is "aimed at turning the block into a world-class food market, with the winning party to also build apartments on the site." It is not provided that these apartments will include any Affordable and/or Social housing component. 

The piece also provides that the Government "is taking offers for the development rights to transform the nearby White Bay Power Station into a 100,000 square metre office park". An article the the Inner West Courier dated 4 February says that the University of Sydney, University of NSW, University of Technology Sydney, and Macquarie University are hoping to develop the space into a shared campus for tech students. The request for proposals for the White Bay site closes on 25 February 2016. 

An UrbanGrowth media release dated 9 December 2015 provides that the NSW Federation of Housing Associations, the peak body for community housing in the state, is amongst the 68 organisations granted membership of the 'Bays Precinct Reference Group'. According to the statement, the group "will be an ongoing forum for communication between UrbanGrowth NSW and the community throughout the Bays Precinct Transformation Program". 

Our concerns

The critical need for new social and affordable housing stock in NSW, and especially Sydney, is well-documented. More than 60,000 people are currently awaiting housing assistance on the NSW Housing Register. For most of the state capital - including the Inner Sydney and Inner West allocation zones that include the Bays Precinct - the wait for most types of social housing dwelling is over ten years. The Baird administration has formally acknowledged this need, making the supply of new stock one of its three priorities for social housing over the next decade in its all of government Future Directions strategy. 

The Bays Precinct, meanwhile, is one of the largest and most high profile initiatives of the Government's urban renewal arm. 95 hectares is an extremely large package of land in the inner city. Moreover, a large portion of that which has been slated for redevelopment is publicly owned and currently disused or even empty. That this represents a unique opportunity to contribute to the alleviation of the social and affordable housing crisis in Sydney is self-evident. 

However, despite the project objectives proclaiming the importance of 'housing options', the available evidence suggests delivering social and affordable housing in this precinct is not a priority. The immediate priorities for renewal - the power station and fish markets - look set to include no social or affordable housing at all. Only long-term priority Lilyfield "may" include a mix of housing, when developed at an undetermined point in the future. Community Housing interests will have a voice on the project reference group, amongst more than sixty other organisations representing myriad interests.

Completing the Bays Precinct renewal without the inclusion of social and affordable housing will represent a unique opportunity lost - both for the tens of thousands enduring an interminable wait for stable and secure housing, and for our state Government who has recently placed a great deal of emphasis on increasing the city's 'social mix'.

$1bn Social and Affordable Housing Fund announced

The NSW Government has unveiled the first details of its 'one billion dollar social and affordable housing fund' (SAHF), at an industry briefing on 11 December 2015. 

According to David de Carvalho, Deputy Secretary - Strategic Reform and Policy at the Department of Family and Community Services, monies from the fund will be used to bridge a funding gap in proposed new social and affordable housing developments, to make such projects commercially viable. Project consortia including at least one Tier 1 or Tier 2 community housing provider may apply for funding. Mr. de Carvalho provided that the fund will deliver "at least 3000" social and affordable housing dwellings - and anticipated further funding if this "initial stage" is successful. 

Community housing providers are the principal beneficiaries of the SAHF

To be eligible for funding, a proposed development must provide a minimum of new social housing dwellings - 500 for metro or mixed metro and regional developments, and 200 for regional developments. In this context, 'new dwellings' can mean either newly constructed or newly available as social housing. Richard Mills, Project Director at the NSW Treasury, said the Government has no preference for metro or regional proposals. Furthermore, at least 70% of the total number of dwellings must be social or affordable housing. The Government anticipates that community housing providers involved will hold unencumbered title to social and affordable housing residences funded under the scheme.

Both Mr. de Carvalho and Mr. Mills emphasised that projects delivering a mix of social, affordable, and private market dwellings over multiple locations would be preferred. Mr. de Carvalho said projects would "ideally" be located close to employment, services, and public transport. Both also stressed a preference for projects built on unused or under-utilised land already owned by the applicant housing provider/s. Mr. Mills agreed with a suggestion from a briefing attendee that consortia need not apply if a proposed development does not satisfy this preference. 

It is important that not all funding for successful applications will go towards construction of dwellings. Funding will be provided for the community housing providers' tenancy and asset management services. Social service providers are also expected to form part of applicant consortia. This is because funding will also go to what the briefing presentation called "Tailored Support Coordination" - that is, services that support the deemed needs of resident social housing tenants. According to Mr. de Carvalho, such supports will ideally facilitate increased educational and employment prospects, and ultimately a transition out of social housing. Mr. Mills emphasised that this funding will provide for the "coordination" of social services - that is, linking them and monitoring activities - but not the client support activities themselves. Indeed, project funding will be provided over a period of 25 years, as opposed to a lump sum. 

The briefing presentation provided the following timeline for the initiative:

"14 December 2015 - Registration process [for interested participants] opens;
Late January 2016 - Release of Invitation for expressions of interest;
March 2016 - Deadline for submissions of expressions of interest;
May 2016 - Announcement of shortlisted Applicants;
May 2016 - Release of requests for proposal;
May-July 2016 - Interactive process;
July 2016 - Deadline for submission of proposals;
August 2016 - Announcement of preferred proponents;
September 2016 - Service agreements awarded."

The SAHF was initially promised by the Liberal-National Party coalition prior to the 2015 NSW election. The substantive policy announced on 11 December was developed in conjunction with the NSW Council of Social Services (NCOSS), with reference to a Memorandum of Understanding, and infrastructure think tank IPA. 

Premier Mike Baird is expected to make another announcement concerning the fund in early 2016. The full industry briefing is available here, and the accompanying presentation here. 

Our response

NSW is experiencing a renting affordability crisis. Approximately 60,000 people are currently on the waiting list for social housing in NSW. The wait time for a majority of dwellings - particularly larger houses, and almost all properties in Sydney - is at least five years, and often more than a decade. Moreover, due to the preference given to 'priority' applicants in allocating available properties, an offer of social housing for many non-priority applicants will most likely never arrive.

The Tenants' Union strongly supports the expansion of the state's social and affordable housing stock in NSW as a central measure to address this crisis. Accordingly, we are supportive of the basic objective of the SAHF to provide 3000 new social and affordable dwellings. However, we also agree with the closing comments provided by Acting NCOSS CEO John Mikelsons at the industry briefing, that "tomorrow, even with this fund, we will still have a housing affordability crisis in NSW". An additional 3000 dwellings represents a commendable first step rather than anything close to a solution. Mr. Mikelsons also identified the need for inclusionary zoning and tax reform to adequately address this issue. Here, too, we broadly concur, though would add that reform to tenancy laws is also important. 

Our response to the finer details of the scheme is also mixed. We support the requirement that funded projects consist of at least 70% social and affordable housing. This provides an appropriate focus, and should serve as an important safeguard against use of the initiative as a de facto subsidy for private market developments. Moreover, the benefits to tenants of housing close to transport, employment, and education facilities are self-evident - though this does not appear to be a strict requirement for funding. 

The preference for developments on 'unused or under-utilised' land already owned by applicant housing providers should provide for efficient use of Government funds, and hopefully the delivery of as many new residences as possible. We are somewhat concerned, however, by the possibility that low-density community housing may be considered 'under-utilised'. This would raised the prospect of painful eviction and relocation for existing tenants. 

But the requirement that funded projects include "Tailored Support Coordination" seems to signal the continuation of a worrying trend in social housing in NSW. It assumes an intrinsic and necessary connection between poverty and social support. The successful 'Housing First' initiative negates such a presumption. The expectation on efforts to 'transition' to the structurally insecure and unaffordable private market is also cruel and unrealistic for most. Finally, such an approach further entrenches housing as a privilege to be earned and lost, as opposed to a basic need and a human right. 

Macquarie Park redevelopment update

The NSW Government has released further details of the Macquarie Park redevelopment.

According to a Department of Family and Community Services media release, construction works will take place on the site of the NSW Land and Housing Corporation's Ivanhoe Estate. It follows that State Property Authority land in Macquarie Park will not be utilised, and no private property will be acquired. Furthermore, the precise number of affordable housing dwellings to be constructed is 128.

An artist's impression of the Macquarie Park redevelopment

The redevelopment will also form part of a new FACS initiative called 'Communities Plus'. According to Fairfax Media's story on the announcement, the initiative will deliver approximately 550 social, affordable, and private dwellings in Gosford, Newcastle, Tweed Heads, Seven Hills, Telopea, and Liverpool, in addition to the Macquarie Park project. 

Precise details about the initiative are not yet available. It appears that all Communities Plus developments will contain a mix of social, affordable, and private residences. According to Fairfax, developers will hold the private dwellings, the NSW Government will hold social housing dwellings, and community housing providers will hold affordable housing. 

In the Fairfax story, FACS Minister The Hon. Brad Hazzard MP also describes Communities Plus as, "a new way of thinking in social housing. Many of the new social housing units will be a base for pilot programs that link housing assistance to education, training and local employment opportunities." And the FACS media release describes the project as a collaboration of "the very best in urban design, construction, community engagement and tenancy services."

Minister Hazzard will host an industry briefing on Communities Plus on 4 November 2015. 

On the lookout for social housing strategies

The Auditor-General's report in July last year set out the context for much of the present interest in social housing redevelopment (we discussed the report in this post on the Brown Couch). The report also recommended Housing NSW and the NSW Land and Housing Corporation produce some policy statements on social housing strategy in this State – and recommended some dates for their production.

Keep a lookout for movement on the following recommendations:

• HNSW should, by December 2013, complete a social housing policy that aligns tenant management with emerging client need.  
• LAHC should... by December 2013, complete and release an asset portfolio strategy that delivers housing at an appropriate standard and shows how future new supply housing will align with emerging client need.  
• LAHC in consultation with HNSW by December 2013, finalise the government’s long-term strategy for managing public housing estates to deliver a sustainable reduction in disadvantage on estates. 
• HNSW and LAHC should... by June 2014, develop organisational plans that are clearly linked to their social housing policy, asset portfolio strategy and estate strategy including:

− gap analysis
− objectives
− targets
− funding
− performance measures and progress reporting.